EIA lowers 2012 forecast for US crude oil prices

Spot prices for West Texas Intermediate, the US benchmark, will average $88.51/bbl in the fourth quarter, according to the December edition of the US Energy Department's Short-Term Energy Outlook. That's down from the $89.50/bbl that was predicted in November's report.

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By PAUL REKOFF

US officials cut their forecasts for domestic crude oil
prices by nearly a dollar for this year's last three
months.

Spot prices for West Texas Intermediate, the US benchmark,
will average $88.51/bbl in the fourth quarter, according to the
December edition of the US Energy Department's Short-Term
Energy Outlook.

That's down from the $89.50/bbl that was predicted in
November's report. The Energy Department's Energy Information
Administration puts out its forecast of prices and industry
conditions monthly.

Other than the drop in US crude prices, the forecasts did
not vary much from the previous month's outlook.

The fourth-quarter gasoline price forecast fell to $3.52/gal
from November's prediction of $3.56; diesel fuel rose to
$4.02/gal from $4.00 and home heating oil inched down to
$3.85/gal from $3.86.

Spot natural gas prices, at the Henry Hub, were predicted to
rise to $3.50 a million British thermal units, from $3.46
mmBtu.

However, the natural gas prices were one of the few to move
more than a few cents in terms of forecasts for 2013. The
year-long prices climbed to $3.68/mmBtu from the $3.49/mmBtu
predicted in November.

Natural gas prices have steadily climbed all year after
increased production combined with a weak demand from a
warmer-than-normal winter to produce a glut of the home heating
fuel.

Prices fell below $2.00, a 10-year-low, until utilities began
substituting it for coal. The price rise has accelerated over
the last three months, with prices rising about $1 per million
British thermal units.

All the rest of the changes to the 2013 forecasts from
November's report did not move more than a few pennies. The
exception was for the spot crude prices. The forecast for US
crude rose to $88.38/bbl from November's $88.29/bbl, while the
prediction for Brent rose to $103.75/bbl from $103.38.

Dow Jones Newswires

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